This Week – February 18, 2011

This Week in Washington DC:

  1. President Obama Offers Budget with 2 Year Delay in Medicare Physician Payment Cuts
  2. House Judiciary Committee Approves Medical Malpractice Liability Overhaul
  3. House Ways & Means Committee Approves Measure Repealing IRS 1099 Provision
  4. House Votes to Defund Certain Provisions in the Health Reform Law

On Monday, February 14th, President Obama released his proposed budget for FY 2012.  Included in the $3.7 trillion measure to fund the federal government was a provision that prevents for two years Medicare physician reimbursement cuts due to the sustainable growth rate (SGR) formula.  The President’s budget prevent cuts in 2012 and 2013 while also preserving provisions contained the health law reform law passed in March 2010, the Patient Protection and Affordable Care Act (now known as the Affordable Care Act or ACA)

According to the President’s budget, preventing Medicare reimbursement cuts in 2012 and 2013 will cost the federal government $62 billion over ten years.  The two year reprieve would be paid for in part by “Medicare program integrity provisions” or recaptured funds from Medicare waste, fraud, and abuse programs.  The remainder of the offset would come from $10.5 billion in cuts in Medicaid payments and $13 billion from lower payments to pharmaceutical companies in an effort to move towards more generic pharmaceuticals.  It is important to note that the President’s budget proposal is only a blueprint from which Congress will begin deliberation.  The Republican-controlled House may offer a proposal to overhaul the SGR formula that is offset by repealing certain provisions contained in the ACA.

ACG will update its membership as Congress debates the 2012 budget and SGR payment formula.

House Committee Approves Medical Malpractice Liability Overhaul

On Wednesday, February 16th, the House Judiciary Committee approved a bill that restricts monetary damages, establishes a statute of limitations for filing medical malpractice suits at three years after the date of injury or one year after the injury is discovered, and limits certain attorneys fees based on the value of the judgment amount.  The Committee approved the measure on a party-line vote of 18-15.  The bill would not limit economic damages but caps non-economic damages at $250,000.  An amendment to allow this cap to increase with inflation was rejected also on a party-line vote.  The Committee did allow an amendment prohibiting the court from considering “collateral sources” of other payments to the plaintiff as a result of the injury.  It is unclear when the House will vote on bill.  It is unlikely the Senate and President Obama will support the bill even if the measure is approved by the House.

ACG will continue to monitor these developments and update membership as the measure moves through Congress.

House Committee Approves Measure to Repeal IRS 1099 Requirements

On Thursday, February 17th, the House Ways & Means Committee approved by voice vote a measure that repeals a provision in the ACA requiring all businesses to file an IRS Form 1099 for every vendor to whom the business pays more than $600 per year.  This requirement is scheduled to take effect in 2012 and is estimated to raise $19.2 billion in federal tax revenue over ten years.  House Majority Leader Eric Cantor (R-VA) said on Thursday that he would like to bring the measure to the House floor for a vote sometime this spring.  While both parties, as well as President Obama, agree that this 1099 provision should be changed there is disagreement over how Congress will pay for the repeal.

The Senate agreed to a similar bill earlier this month by a vote of 81-17.  The Senate bill is offset by a vague “$44 billion in unobligated discretionary funds.”  House Republicans would like to pay for the measure by allowing the federal government to recapture overpayments in subsidies to consumers purchasing health insurance beginning in 2014.  House Democrats have argued that the House should adopt the Senate-passed measure.  Sen. Mike Johanns (R-NE) has led this effort in the Senate and responded this week by introducing a bill that contains the House Republicans’ offset.

ACG will continue to monitor and update membership on these developments as the issue moves through Congress.

House Passes Amendments to Defund Parts of the Health Reform Law

On Friday, February 18th, the House voted to defund certain provisions in the ACA.  Among the amendments the House passed as part of the Continuing Resolution to keep the federal government in operation past March 4, 2011 were amendments by Rep. Denny Rehberg (R-MT) prohibiting funds for any federal agency to implement the ACA in 2011 and Jo Ann Emerson’s (R-MO) measure blocking the Internal Revenue Service from enforcing the ACA mandate requiring individuals to purchase health care beginning 2014.  These amendments to the Continuing Resolution are not expected to be addressed in the Senate.  They do, however, only add to the tension in Congress and possibility of the government shutdown in March.

ACG will update membership as the Continuing Resolution moves through Congress.

Please stay tuned for further updates.  Please also share and discuss your thoughts with fellow ACG members on the ACG GI Circle. To login and share your comments, visit  If you have not yet activated your ACG GI Circle account, please email us at

Contact Brad Conway, VP Public Policy, with any questions or for more information.

Brad Conway